Brussels, 27/05/2010 (Agence Europe) - On Thursday 27 May, the European Commission adopted new competition rules for agreements between vehicle manufacturers and their authorised dealers, repairers and spare parts distributors. The new rules relate to all motor vehicles (cars, lorries and busses). They will increase competition in the market for repair and maintenance by improving access to technical information needed for the repairs and by making it easier to use alternative spare parts. They will also make it easier to tackle manufacturers' unfair or restrictive practices. In the distribution sector the rules will also reduce distribution costs for new cars by eliminating overly restrictive rules.
The new rules, which consist of a new block exemption regulation and new guidelines on the application of competition rules, were adopted to take account of the level of competition, which varies on the two markets. Thus:
- in the vehicle sales market, where competition is strong and where prices have fallen and profit margins for manufacturers and dealers have gradually been straitened, current sectoral rules have proved to be too complicated and have had the indirect effect of increasing distribution costs by around 20%, which represents, on average, 30% of the cost of a new vehicle. The Commission proposes, then, to align the rules that apply in this sector with those which are applicable to distribution agreements in other sectors, with a three-year transition period to allow dealers to adapt to the change. While the current distribution model will continue to allow exemptions in most cases, some sectoral provisions, which have proved ineffective or counter-productive, will be removed. The new system will give manufacturers greater flexibility in organising various networks where multi-brand and single-brand dealers co-exist
- in the vehicle repair and maintenance market, where repair bills represent 40% of the cost of owning a vehicle, the Commission has found that there is not enough competition between authorised and independent repairers, and that there has been an increase in the cost of repairs. To address this development which penalises independent repairers and consumers, the Commission will introduce tougher rules with a market share threshold of 30% above which agreements between car manufacturers and authorised repairers will no longer be covered by a block exemption and will, therefore, be brought within the general framework (the block exemption regulation applicable to vertical agreements - regulation 330/2010, adopted on 20 April). Thus, the Commission will be able to address more effectively such unfair practices by manufactures as refusing to provide independent repairers with technical information, restrictions on the sale of spare parts to independents, restricting independent spare parts manufacturers in the quantities they can supply to authorised and independent repairers, affixing their logo to spares, etc. Neither will car manufacturers be able to refuse to honour warranties if consumers have their cars repaired at independent garages. They will, however, be able to demand that repairs covered by warranty - the costs of which they will bear - be carried out within their authorised network.
“I strongly believe the new framework will bring tangible benefits for consumers by bringing down the cost of repairs and maintenance … It will also reduce the cost of distribution by doing away with overly restrictive rules,” said Commission Vice-President and Competition Commissioner Joaquin Almunia.
The new regulation will replace the current block exemption regulation which dates from 2002 and will expire on 31 May. It will come into force on 1 June 2010 for repair and maintenance markets and 1 June 2013 for vehicle sales, and will remain in force until 2023. (F.G./transl.rt)